Restarting private investment in Mexico

By Dumont

The latest OECD Economic Survey of Mexico states that a comprehensive reform agenda would be essential for lifting investment and turning around low productivity growth.

“Restarting private investment and turning around low productivity growth are fundamental priorities to improve Mexico’s medium-term growth potential. This would require comprehensive reforms to improve business regulations, boost competition, reduce informality and corruption and step up efforts to meet greenhouse gas emission targets,” the report says.

According to the OECD investment, muted since 2015 and falling since 2019, is hindered by uncertainty about domestic policy settings. With the appropriate policy settings the potential for investment to restart is high. Mexico could reap further benefits from the strong recovery in the United States and the on-going reorganisation of global supply chains closer to consumer markets. Of particular importance are reforms to provide certainty about existing contracts and regulatory stability

Some of the key recommendations of the study are:

-Provide investors with certainty about existing contracts and regulatory stability.
-Strengthen the credit registry system by ensuring that all lenders are able to access all credit history information.
-Upgrade digital payment regulations to facilitate entry in payment card market.
-Establish a comprehensive strategy to reduce the cost of formalization, including reducing firms’ registration costs at the state and municipal level.
-Strengthen competition, including by ensuring that the competition authority remains independent and adequately resourced and by reducing regulatory burden.